Workfare food stamps and UI benefit entitlement

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| U.S. DEPARTMENT OF LABOR | CLASSIFICATION |
| Employment and Training Administration | |
| Washington, D. C. 20210 | UIS |
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| | CORRESPONDENCE SYMBOL |
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| | TURL |
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| | ISSUE DATE |
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| | September 7, 1982 |
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| RESCISSIONS | EXPIRATION DATE |
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| | September 30, 1983 |
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| DIRECTIVE | : | UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 31-82 |
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| TO | : | ALL STATE EMPLOYMENT SECURITY AGENCIES |
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| FROM | : | T. JAMES WALKER |
| | | Administrator |
| | | Administration and Management |
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| SUBJECT | : | Treatment of Food Stamps Under Workfare Requirements for Purposes of Benefit Entitlement |
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1. Purpose. To inform SESAs of mandatory workfare requirements for food stamp allotments and their effect on weekly benefit entitlement.

2. References. Food Stamp Act of 1977 as amended by P.L. 97-98, approved December 22, 1981.

3. Background. Under the amendments, a State or any political subdivision of a State may apply to the Secretary of Agriculture and submit a plan for operating a workfare program, pursuant to which "every member of a household participating in the food stamp program who is not exempt...shall ...work on its behalf... in return for compensation consisting of the allotment to which the household is entitled." Each hour of work is treated as equal to the higher of the State or Federal minimum hourly wage.

   Unemployment benefit claimants are now not exempt from workfare requirements by reason of claim status, as was previously the case. The work required in return for food stamps, up to the value of the household's allotment, may not exceed 20 hours a week or; together with any other hours worked for compensation, 30 hours a week.

   The agency operating a workfare program must provide the same job benefits and working conditions that are provided at the job site to employees performing comparable work for comparable hours. The operating agency will reimburse workfare participants for actual costs of transportation and other expenses directly related to and necessary for participation, but not in excess of $25 in the aggregate per month.

4. Effect of workfare on benefit entitlement. In the demonstration projects, carried out before the amendments to the Food Stamp Act were enacted, most of the workfare requirements for food stamp allotments were fulfilled by five days of work or less per month. On the other hand, as stated above, a workfare participant may be required to work up to 20 hours in a week to equal the value of a household's food stamp allotment. When the participant is also in unemployment benefit status, there may or may not be a workfare effect on benefit eligibility.

   The workfare program poses three issues: (1) are the food stamps obtained as "compensation" for workfare a form of remuneration or earnings for purposes of determining a claimant's weekly benefit amount; (2) does participation in workfare interfere with availability and active search for work requirements; and (3) is the work for a governmental entity required to be covered employment pursuant to Section 3309(a)(1), FUTA.

   The food stamps obtained by fulfilling workfare requirements are not remuneration or earnings for any purpose. The Food Stamp Act provides that:

   "The value of the allotment provided any eligible household shall not be considered income or resources for any purpose under any Federal, State, or local laws, including, but not limited to, laws relating to taxation, welfare, and public assistance programs . . ." 7 USC 2017(b).

   The transportation and other expense allowances should also not be deemed remuneration.

   If the workfare requirements are fulfilled by the equivalent of five days of work per month or less, it would seem to have little effect, if any, upon a claimant's availability and fulfillment of the active search for work requirements, unless the workfare is concentrated in a week. The latter requirements might be different under a State law depending on whether regular benefits or extended benefits are being claimed. In any case, regard should be given to the purposes of the food stamp program and the nature of workfare to avoid unduly penalizing benefit claimants who are also workfare participants as a condition of receiving food stamps.

   The performance of work under workfare probably does not entail an employer-employee relationship. Even if such work may be considered service for an employer, it need not be covered as employment for a governmental entity. Such service may be exempt from coverage under a State law provision paralleling the unemployment work relief or work training exemption of Section 3309(b)(5), FUTA.

   Notice of proposed rulemaking on the workfare requirements was published by the Department of Agriculture on June 8, 1982, 47 FR 24968.

5. Action required. SESAs are requested to apprise themselves of workfare requirements and practices in their States and to determine, under their respective State laws, the effect of workfare participation upon benefit eligibility and entitlement.

6. Inquiries. Questions should be directed to the appropriate regional office.